Jackson Jambalaya

The House Energy and Commerce Committee issued a report Monday stating the largest health insurers will raise their insurances rates on some policies 100 to 400% to comply with Obamacare. The report states:

On March 14, 2013 the committee sent letters to 17 of the nation’s largest health insurance companies requesting analyses of the effect of PPACA’s policies, mandates, taxes, and fees on premiums.

"The materials submitted by the health insurance companies show that the PPACA will increase premiums significantly for most Americans. One company stated: “…consumers in about 90% of all states would likely face significant premium increases.”....

The materials insurers provided to the committee indicate that consumers who purchase insurance in the individual market after full implementation of the PPACA will be hit with substantial premium increases. One insurer noted that 45 states and the District of Columbia “will see significant premium increases.”..

The total average change due to the PPACA for new business in the individual market will be a 96 percent increase in premiums. Existing customers can expect an average increase of 73 percent. Note that these are only the average expected changes because of the PPACA. As is shown above, new business in the individual market could see a premium increase of 413 percent when new requirements on age rating and required benefits are taken into account.

In dollars, this is a large hit to every American’s pocketbook. The average yearly cost for a new customer in the individual market grows from $1,896 to $3,708 -- a $1,812 cost increase. Another insurer provided materials showing that the average increase would be much higher for a young, healthy male."

Pages six and seven provide estimates for individual health insurance premiums in various states. Pages eight to eleven provide similar information for the small group market. It seems the increases for both Georgia and Tennessee will be smaller than in other states.

I know what some readers are going to see. Republican spin, propaganda, GOP talking points, blah blah blah. Fair enough. Time will tell if these estimates are true so one side will eventually be able to come back and say I told you so. I'm inclined to believe these estimates. You abolish risk-based underwriting and premiums, mandate a minimum level of services, remove all exclusions or limitations, and expect the price of health insurance to stay the same. Obamacare implicity recognizes this as it offers subsidies. In effect an indirect price control similar to the Fed's Quantitative Easing. The people who pay the cheapest premiums today, healthy young people, are going to face the largest increases as the insurers can't pass the increased costs of coverage on to those who are the riskiest to cover. Stay tuned.